Aluminium prices increased by 0.64%, concluding at Rs 261.35, bolstered by apprehensions regarding supply and a resurgence in demand as operational rates improved. Ongoing supply challenges, such as interruptions in Guinea and constrained production in China, supported price levels. China’s manufacturing PMI registered at 49.8, remaining below the critical 50 threshold, indicative of lackluster industrial activity; however, ongoing production constraints persist in providing support for prices.

Chinese aluminium production is approaching its annual limit of 45 million tons, which is likely to restrict additional supply expansion. Meanwhile, the revocation of mining licenses for Guinea Alumina may hinder ore supplies to significant producers like Emirates Global Aluminium. Globally, the supply of aluminium continues to be constrained. The world aluminium market experienced a deficit of 119,900 tons in July and a cumulative deficit of 985,300 tons from January to July 2025, as per reports.

LME aluminium inventories experienced a significant decline of nearly 100,000 tons, reaching 375,000 in early September, driven by speculative buying and robust physical demand. Global primary aluminium output experienced a slight increase of 0.9% year-on-year in August, reaching 6.277 million tons, with China’s production rising by 1.22% year-on-year during the same month. In July, China exported 542,000 tons of unwrought aluminium, whereas imports in August experienced a year-on-year increase of 12.9%, reaching 320,000 tons, which suggests strong domestic consumption.

Aluminium is currently experiencing new buying activity, as evidenced by a 2.55% increase in open interest, reaching 4,590 lots. The metal exhibits support at Rs 259.2; a decline beneath this level may lead to a test of Rs 257. Conversely, resistance is identified at Rs 263.8, with a breach above this threshold potentially driving prices toward Rs 266.2.